Market Information

MARKET INFORMATION UPDATE

By Jamie Gamble, BFO Market Information Coordinator markets@ontariobeef.com • www.ontariobeef.com

Statistics Canada released the January 1, 2021 cattle stats report early this March. By category, fed steers and heifers on Ontario farms totaled 385,600 head which is an increase of 3.7% over January 1, 2020. Of that total, heifer volumes were up 12.3% from 2020 which is the largest January 1st volume since 2012. January 1 steer volumes were down by 7% from January 1, 2020 and is the lowest January volume reported since the same time in 2014. Fed cattle volumes on Ontario farms have only been above 400,000 head once (in 2018) since January 1, 2012, with the 2021 volume being the fourth lowest January numbers in the last ten years.

The beef cow volumes on Ontario farms as of January 1, 2021 were 240,800 head which is the lowest January 1st inventory since January 1, 1952 according to the Statistics Canada report. This current January was down 3.25% from January 1, 2020, however volumes for the last five years have been fluctuating between 240,800 to 249,400 head. Replacement heifer volumes were also at lower levels on January 1, 2021 at 40,400 head, down 6.3% from January 1, 2020 and the lowest January volume since January 2014.

Replacement cattle volumes on Ontario farms as of January 1, 2021 were reported at 436,000 head, up 5.5% from last January and the largest January volume since 2016. The January 1, 2020 volume was the lowest January 1 replacement cattle volume since data collection began in 1932.

The Ontario fed cattle market has been under pressure the first quarter of 2021 with little price movement. January to the first week in February, prices were steady at $236.00 dressed. In early February, prices increased to $240.00 cwt dressed and traded between $240.00-$241.00 on average until the second week in April. The shutdown of Cargill Meat Solutions in Guelph at the end of 2020 due to COVID-19 related issues saw cattle starting to back up in feedlots, but thankfully the shutdown was short lived. However, it still added to the backlog of cattle and saw carcass weights increasing. Some cattle were able to get onto the set-aside program which provided some financial support but many did not get registered. Packers have been working tirelessly to get through the volumes of larger animals and it appears at this time that things have improved. In March of this year, TruHarvest Meats (the previous Ryding-Regency facility) opened their doors for the first time which is adding some muchneeded capacity for Ontario beef farmers. Although it will take a bit of time to ramp up to full capacity, it has been some very positive news for an industry that has been struggling for quite some time. At time of reporting in mid-April, prices have improved by $8.00 cwt in the last two weeks with steers now sitting at $248.00 dressed. Although prices are above year ago values, they are sitting around $10.00 easier than 2019 at this time and the five-year average. Prices are expected to seasonally improve over the next couple of months.

Ontario federal processing volumes as of April 16 total 168,562 head, up 4.2% over the same time in 2020 which is the second largest year-to-date volume in this data set starting in 2011. Steer volumes are up by just 163 head, heifer volumes up by 3,181 head and cow processing volumes are up by 3,508 head, however all categories are below 2019 at the same time period. Exports of live fed cattle and cull cows to the U.S. through Ontario ports as of April 3, 2021 are at 36,152 head, up 3.3% from the same time last year and 23% higher than April 3, 2019. 2021 export volumes are also up 14% from the five-year average. Volumes have been on a decline very recently as the Canadian dollar increased and the number of cull cows coming to market has been lighter, with the April 3, 2021 weekly volume below both the last two years and the five-year average.

Ontario federal and provincially inspected carcass weights have been collected since 1997. January 2021 was the highest monthly average in this data set at 990 lbs for steers and February 2021 was reported at 983 lbs. The closest monthly average weight for steers was set in January 2016 at 987 lbs with February 2016 at 983 lbs. Weights are currently on the decline but are still averaging 10 to 20 lbs heavier than last year at this time and in 2019 respectively, and 10 lbs heavier than the five-year average. Weights should moderate as cattle feeders become more current. Rising grain prices will also contribute to lower carcass weights moving forward.

Cull/fed cows in Ontario saw larger volumes trade at auction markets to start 2021, but since mid-March numbers have declined and are lower than the same time in 2020 and 2019 on a weekto-week basis. Overall volumes as of April 15, 2021 are 41,486 head, down 1.2% from the same time in 2020, but 16% more than the same time in 2019. The prices this year have increased as the volumes declined, with April 2021 prices stronger than the last two years and the five-year average.

Most classes of stocker and feeder cattle started out 2021 on a much lower tone. The Cargill two-week closure due to COVID-19 in Ontario left feedlots with limited pen space and little demand. Since the beginning of 2021, all classes have rebounded and are currently trading on a fairly good demand with all classes stronger than last year and 2019 at this time, along with the five-year average. Prices for April 2021 are calculated up until April 15 due to print deadlines. Volumes of stockers sold through auction markets were slow to start the year for the same reasons as the pressure on the pricing. However, 2021 volumes have picked up and are calculated at 58,768 head as of April 15, 2021, up 7% from the same time in 2020 and 1.5% more than in 2019. The April 15, 2021 volume is the largest volume since 2015 and the third largest year-to-date volume in this data set.

Predicting the market continues to be a challenge as factors constantly change. Keeping up to date on the market conditions and events are important. BFO has a COVID-19 resource section on our website which is updated very frequently with information that can help keep you informed. The market information section of our website can also help you keep an eye on current market prices. For those without technology, BFO provides a tapeline which is updated twice a day with the day’s auction market sale reports, railgrade prices, cattle futures and the Alberta and U.S. markets. This can be accessed toll free by calling 1-866-370-2333 or locally at 519824-0334. Just dial extension 301 for the noon report and 300 for the evening report (or the rail report). Daily and weekly reports are available on the BFO website under Market Info or via email and fax. The weekly report is available by regular mail for those without access to the internet. Stay well and stay safe! OB